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±(/(&75,&$1'$66(0%/<',$*5$06 :$51,1* 3DJH 7KLVGRFXPHQWFRQWDLQVSURSULHWDU\LQIRUPDWLRQ1RSDUWRIWKLVSXEOLFDWLRQPD\EHSKRWRFRSLHGRU UHSURGXFHG ZLWKRXW WKH SULRU ZULWWHQ SHUPLVVLRQ RI (%1HXUR ,QIRUPDWLRQ LQ WKLV GRFXPHQW LV VXEMHFWWRFKDQJHDQGUHYLVLRQZLWKRXWQRWLFH (GLWLRQ %5HY$-XQH %±5HY%±2FWREHU 7KH 6HUYLFH 0DQXDO RI WKH +$//(< 3RFNHW ((* FRQWDLQV DOO LQIRUPDWLRQ LQWHQGHG IRU WKH SHUVRQQHOTXDOLILHGIRUVHUYLFLQJDQGUHSDLULQJWKHDSSDUDWXV )RUDQ\IXUWKHUWHFKQLFDORSHUDWLRQDORUVHUYLFHLQIRUPDWLRQSOHDVHFRQWDFW (%1HXUR 6S$ 2SHUDWLYHRIILFH 9LD3LHWUR)DQIDQL,,,$ )/25(1&(,7$/< 3KRQH )D[ &+$37(5 *(1(5$/'(6&5,37,21 7KH+$//(<LVDGHYLFHWRDFTXLUHWKHHOHFWURHQFHSKDORJUDSKLFVLJQDO ((* DVZHOODVDIHZ RWKHUHOHFWURSK\VLRORJLFDOSDUDPHWHUVRQKLJKPHPRU\SK\VLFDOVXSSRUWE\PHDQVRID³3&0&,$´ 3HUVRQDO&RPSXWHU0HPRU\&DUG,QWHUIDFH$VVRFLDWLRQ VWDQGDUGLQWHUIDFH 6XFKVXSSRUWZLOOEHXVHGLQWKH³*DOLOHR´DUFKLYHV\VWHPRIWKH((*VLJQDO 23(5$7,1*&21),*85$7,216 7KH +DOOH\LVDQ³LQWHOOLJHQW´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¶VFRPSXWHU 7KHIROORZLQJILJXUHVVKRZWKHIXQFWLRQDOVFKHPHVRIWKH+DOOH\ LQWKHFRQILJXUDWLRQDV³*DOLOHR VWDWLRQ´DQGLQWKHFRQILJXUDWLRQDV³VWDQGDORQH´UHVSHFWLYHO\ :KHQWKH+DOOH\ LVXVHGLQWKH³*DOLOHRVWDWLRQ´FRQILJXUDWLRQ LWLVFRQFUHWHO\DQ((*SDWLHQW LQSXWER[IRUGLJLWDOHOHFWURHQFHSKDORJUDSKV,WSHUIRUPVWKHIROORZLQJIXQFWLRQV x PHDVXUHPHQWRIWKHLPSHGDQFHRIWKHHOHFWURGHVWKURXJKDFXUUHQWLQMHFWLRQ x DFTXLVLWLRQRIWKH((*SRWHQWLDOVWKURXJKHOHFWURGHVSODFHGRQWKHSDWLHQW¶VVFDOS x DPSOLILFDWLRQRIWKHDFTXLUHGVLJQDOVLQDGLIIHUHQWLDOPRGH x VDPSOLQJRIWKHDFTXLUHGVLJQDOVWKURXJKLQVWDQWDQHRXV³7UDFNDQG+ROG´SURFHGXUH x DQDORJLFGLJLWDOFRQYHUVLRQRIWKHVDPSOHV x KLJKSDVVDQGORZSDVVILOWHULQJRIWKHVLJQDOE\PHDQVRI'63 x WUDQVPLVVLRQRIWKHGLJLWDOVLJQDOLQWKH*DOLOHRVWDQGDUGIRUPDWWRWKH*DOLOHRVWDWLRQRYHUWKH 56VHULDOSRUWRUVWDQGDUG&HQWURQLFVSDUDOOHRSRUW x LVRODWLRQRIWKHVLJQDOWRZDUGVWKH*DOLOHRVWDWLRQE\PHDQVRIDQLVRODWLRQWUDQVIRUPHU x H[HFXWLRQRIWKHFRPPDQGVUHFHLYHGE\WKH*DOLOHRVWDWLRQ :KHQWKH+DOOH\ LVXVHGLQWKH³VWDQGDORQH´FRQILJXUDWLRQLWLVDSRUWDEOHUHFRUGHUIRU HOHFWURHQFHSKDORJUDSK\DQGSRO\JUDSK\ G\QDPLF((* ,QWKLVFRQILJXUDWLRQLWSHUIRUPVDOOWKH IXQFWLRQVGHVFULEHGDERYHIRUWKH³*DOLOHRVWDWLRQ´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³*DOLOHRVWDWLRQ´FRQILJXUDWLRQ HOHFWURGHV 3&*$/,/(2 +$//(< UHPRYDEOH VXSSRUW *DOLOHRILOH UHPRYDEOH VXSSRUW *DOLOHRILOH 7KH+DOOH\LQWKH³VWDQGDORQH´FRQILJXUDWLRQ &+$37(5 7(&+1,&$/&+$5$&7(5,67,&6 x 3URWHFWLRQDJDLQVWHOHFWULFVKRFNV ,QWHUQDOEDWWHU\SRZHUHGHTXLSPHQW &ODVV, LQFDVHRIFRQQHFWLRQZLWKD*DOLOHRVWDWLRQ x 3URWHFWLRQGHJUHHDJDLQVWGLUHFWDQGLQGLUHFWHOHFWULFFRQWDFWV 7\SH&) LQFDVHRIFRQQHFWLRQZLWKD*DOLOHRVWDWLRQ x 3URWHFWLRQGHJUHHDJDLQVWLQIORZRIVROLGVDQGOLTXLGV &RPPRQ ,3 x :RUNLQJPRGH &RQWLQXRXVZLWKLQWKHVSHFLILHGOLPLWV x 2SHUDWLQJHQYLURQPHQWDOFRQGLWLRQV 7HPSHUDWXUH 5HODWLYHKXPLGLW\ $WPRVSKHULFSUHVVXUH IURP&WR& IURPWR5+ IURPK3$WRK3$ x 6WRUDJHHQYLURQPHQWDOFRQGLWLRQV PD[ZHHNV 7HPSHUDWXUH IURP&WR& 5HODWLYHKXPLGLW\ IURPWR5+ $WPRVSKHULFSUHVVXUH IURPK3$WRK3$ x 3RZHUVXSSO\ x ,QWHUQDOEDWWHULHV x 0DVVPHPRULHV x ,QWHUIDFHV x 3URJUDPPLQJ x 'LPHQVLRQV x :HLJKW ,QWHUQDOEDWWHULHV 9'& $X[H[WHUQDOEDWWHU\SDFN 9'&XVLQJ1L0+UHFKDUJHDEOHEDWWHULHV 9'&XVLQJDONDOLQHVWDQGDUGEDWWHULHV ,QFRQQHFWLRQZLWK*DOLOHR 9'& 1XPEHU 'LPHQVLRQV 1RPLQDOYROWDJH &DSDFLW\ QDONDOLQHSHQOLJKWFHOOV $$VL]H 9Q P$K 6ORWIRU3&0&,$+DUG'LVN W\SH,,, 'RXEOHVORWIRU3&0&,$)ODVK0HPRU\&DUG W\SH,, 'RXEOH3&0&,$SRUWZLWKDGDSWHUIRUSDUDOOHOSRUW 6HULDOSRUW FKDUDFWHU/&'GLVSOD\ 1IXQFWLRQNH\V ,QSXWFRQQHFWRUIRUDX[LOLDU\H[WHUQDOSRZHUVXSSO\ )URPSHUVRQDOFRPSXWHU )URPFRQQHFWHG*DOLOHRVWDWLRQ %\PHDQVRIWKH³6KXWWOH´UHPRYDEOHPHPRU\PHGLXP :LGWK +HLJKW 'HSWK PP PP PP DERXWJU ZLWKRXWEDWWHULHVDQGPHPRU\PHGLXP DERXWJU ZLWKEDWWHULHVDQGPHPRU\PHGLXP x )XQFWLRQDOFKDUDFWHULVWLFV 1XPEHURIFKDQQHOV &KDQQHOVLQSXWG\QDPLFV 1RIFKDQQHOVLQ'& HHJSROFKDQQHOV H[WHQGLEOHWR P9 P9 IRUPRQRSRODUFKDQQHOV P9 P9IRUELSRODUFKDQQHOV FKDQQHOVG\QDPLFVP9 5HVROXWLRQ 6DPSOLQJUDWH 'LVSOD\ 0D[HOHFWURGHSRODUL]DWLRQ $'FRQYHUVLRQELWQXPEHU 6WRUDJHPHGLXP ,PSHGDQFHPHDVXUH 6HQVLWLYLW\ 'LJLWDOILOWHULQJ )LOWHUV¶YDOXHV 1RWFKILOWHU 7LPHFRQVWDQW x &RQQHFWLRQWR*DOLOHR 'LUHFWFRQQHFWLRQ ³6KXWWOH´FRQQHFWLRQ x ,QSXWFKDUDFWHULVWLFV &055 ,055 1RLVH 7& PD[WLPHFRQVWDQW 0D[IUHTXHQF\EDQG x ,QSXWFKDUDFWHULVWLFVRI'&FKDQQHOV &055 ,055 1RLVH 9ELW PRQRSRODU$&FKDQQHOV 9ELW ELSRODU$&FKDQQHOV 9ELW '&FKDQQHOV VDPSOHVVHFRQGFKDQQHO FKDUDFWHUOLQHV/&' P9 ELWIRUHHJSRO\JUDSKLFFKDQQHOV ELWIRU'&FKDQQHOV 6WDQGDUG3&0&,$ LQ$&DERXW +] 9 ,,5SROHV KLJKSDVVORZSDVV +] #G%G%RFW +] VHF #G%G%RFW 7KURXJK56VHULDORU&HQWURQLFV SDUDOOHOFRQQHFWLRQZLWKLVRODWRU 7KURXJK3&0&,$UHPRYDEOHGHYLFHV +DUG'LVN)ODVK0HPRU\&DUG G% W\SLFDOG% !G% 9SS V +] G% !G% 9SS &+$37(5 '(6&5,37,212)7+(%2$5'6 7KHV\VWHPLQFOXGHVERDUGV x 'LJLWDOERDUGZLWK'63DQG3&0&,$,QWHUIDFH x 0DVWHUDQDORJLFERDUGZLWK$PS((*WZRIDVWELWVHULDOFRQYHUWHUVDQELW$' FRQYHUWHU x 6ODYHDQDORJLFERDUGZLWK$PS((*WZRIDVWELWVHULDOFRQYHUWHUV x /&''LVSOD\ERDUG ',*,7$/%2$5' 'HVFULSWLRQRIWKHIXQFWLRQV 7KH+DOOH\¶V'LJLWDO%RDUG FRGH% FDQEHGLYLGHGLQWRWKHIROORZLQJHOHPHQWV x 3RZHUVXSSO\JURXS 999 x '63 0DLQSURFHVVRU x 6HULDO,QWHUIDFH x 3&0&,$,QWHUIDFH x SDJHVRIDX[LOLDU\GLVNPHPRU\ x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x 0DLQSURFHVVRUZKHUHWKHGDWDPHPRU\DQGWKHSURJUDPPHPRU\DUHVHSDUDWHGIURPDORJLFDOEXW QRWIURPDSK\VLFDOSRLQWRIYLHZ x ELW.ZRUGVPHPRU\EDQNV 0E\WHPHPRU\ x 6WHS8SGFGFFRQYHUWHUSURGXFLQJWKH9 x 6WHS'RZQGFGFFRQYHUWHUSURGXFLQJWKH9 x 6WHS'RZQGFGFFRQYHUWHUSURGXFLQJWKH9 x 3&0&,$&RQWUROOHU x 3&0&,$3RZHU&RQWUROOHU x )ODVKPHPRU\RQZKLFKWKHUHVLGHQWILUPZDUHLVVWRUHG 7KLVERDUGLVQ¶WSURYLGHGZLWKDQ\DGMXVWLQJV\VWHPDQGGXHWRLWVEXLOGLQJWHFKQRORJ\WKH SRVVLELOLWLHVRIVHUYLFLQJDUHOLPLWHGWRWKHUHSODFHPHQWRIWKHERDUGLQFDVHRIPDOIXQFWLRQ +HUHIROORZVRPHIDLOXUHV\PSWRPVWKDWPD\UHTXLUHWKHUHSODFHPHQWRIWKHGLJLWDOERDUG x 7KH/&'GRHVQ¶WOLJKWXSWKRXJKLWOLJKWVXSZKHQLQVHUWLQJWKHDX[LOLDU\EDWWHULHV 7KH6WHS 8SGFGFFRQYHUWHUSURGXFLQJWKH9PD\EHRXWRIRUGHURUWKHVKXWGRZQPRVPD\EHLQVKRUW FLUFXLW x 7KH/&'GRHVQ¶WOLJKWXSLQDQ\FDVH x 7KH/&'VHQGVDPHVVDJHLQGLFDWLQJDIDLOXUHRIWKH3&0&,$GHYLFHLQGHSHQGHQWO\RIWKH 3&0&,$PHGLXPWKDWLVLQ x ,WLVQRWSRVVLEOHWRHVWDEOLVKWKHVHULDOFRQQHFWLRQ x ,WLVQRWSRVVLEOHWRHVWDEOLVKWKHSDUDOOHOFRQQHFWLRQ 0$67(5$1$/2*,&%2$5' 'HVFULSWLRQRIWKHIXQFWLRQV 7KH+$//(<¶V³0DVWHU$QDORJ´ERDUG FRGH% FRQWDLQV x x x x KLJKGLVFULPLQDWLRQDQGORZQRLVH((*DPSOLILHUV ELW$'FRQYHUWHUV 6ZLWFK0RGHSRZHUVXSSOLHVZLWKORZGURSVHULDOVWDELOL]HU DQELW$'FRQYHUWHUIRUHYHQWVLQ'& %LWV&K0X[6HULDO $'& %LWV)ODVK6HULDO $'& * 'LII$PSO )LOWHUV /3+] 6LJQDOVWR 'LJLWDO%RDUG IRUWKH'63DQG VWRULQJ 7&V )LOWHUV 9EDWW 9 6036 6HULDO5(* 9 7KLVERDUGLVQ¶WSURYLGHGZLWKDQ\DGMXVWLQJV\VWHPDQGGXHWRLWVEXLOGLQJWHFKQRORJ\WKH SRVVLELOLWLHVRIVHUYLFLQJDUHOLPLWHGWRWKHUHSODFHPHQWRIWKHERDUGLQFDVHRIPDOIXQFWLRQ +HUHIROORZVRPHIDLOXUHV\PSWRPVWKDWPD\UHTXLUHWKHUHSODFHPHQWRIWKHPDVWHUDQDORJLFERDUG x 3UREOHPVLQWKHDFTXLVLWLRQRIRQHRUPRUHFKDQQHOVIRUPLQJWKHILUVWJURXSRI x 7KHYROWDJHV9DUHQRWSUHVHQW x $FTXLVLWLRQSUREOHPVRIWKH'&FKDQQHOV 6/$9($1$/2*,&%2$5' 'HVFULSWLRQRIWKHIXQFWLRQV 7KH+$//(<¶V6ODYH$QDORJERDUG FRGH% FRQWDLQV x ((*DPSOLILHUV x $'FRQYHUWHUV * 'LII$PSO )LOWHUV /3+] 7&V )LOWHUV %LW)ODVK6HULDO $'& 6LJQDOVWR 'LJLWDO%RDUG IRUWKH'63DQG VWRULQJ 7KLVERDUGLVQ¶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³3XEOLF´'&GHYLFHOLVW 'LVSOD\VWKHOLVWRIWKHGHYLFHVVXSSOLHGE\WKH+$//(<¶VPDQXIDFWXUHURXWRIZKLFKWKHXVHUFDQ VHOHFWWKHGHYLFHRZQHG 7KLVZLQGRZLVDFWLYHRQO\ZKHQWKHUHLVWKH ³+$//(<,1,´ILOHLQWKH³6\VWHP´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³3ULYDWH´'&GHYLFHOLVW 'LVSOD\VWKHOLVWRIWKHGHYLFHVRZQHGE\WKHXVHUWKDWWKHSURJUDPZLOOWKHQGLVSOD\ZKHQ\RXVHW WKH'&FKDQQHOV &RPPDQGV (QWHU! ,QVHUW! 'HOHWH! 7DE! (VF! DFWLYDWHVWKHHGLWLQJZLQGRZIRUFKDQJHVRUGLVSOD\ DGGVDQHZGHYLFHWRWKHOLVW HOLPLQDWHVWKHGHYLFHIURPWKHOLVW VZLWFKHVWRWKHSXEOLFOLVWZLQGRZLIDQ\ TXLWV ([DPSOHFDOLEUDWLRQSURFHGXUH 7KLVSDUDJUDSKGHVFULEHVWKHFDOLEUDWLRQSURFHGXUHIRUDGHYLFHLQ'&DQGWKHSURFHGXUHWRLQVHUWLW LQWKHOLEUDU\/HW¶VWDNHDQ7KHUPRPHWHUDVDQH[DPSOH :$51,1* 7KHFDOLEUDWLRQSURFHGXUHRIWKHFKDQQHOVLQ'&PXVWEHSHUIRUPHGE\ TXDOLILHGWHFKQLFDOVWDIIH[SUHVVO\DXWKRUL]HGE\(6$27(,QSDUWLFXODUWKLV IXQFWLRQUHTXLUHVH[LWLQJWKH*$/,/(2SURJUDPWKURXJKWKH6+87'2:1 IXQFWLRQIRUZKLFKLWLVQHFHVVDU\WRNQRZWKHV\VWHP3$66:25' x H[LWWKH*$/,/(2SURJUDPXVLQJWKH(;,7DQGWKHQWKH6+87'2:1FRPPDQGV x LQVHUWWKH3$66:25'FXUUHQWO\DFWLYHLQWKHV\VWHPDQGWKHQJRWRWKH'26SURPSW &?! x PRYHWRWKH*$/,/(2GLUHFWRU\WKURXJKWKHFGJDOLOHR FRPPDQGIROORZHGE\ x VWDUWWKHPDQDJHPHQWSURJUDPRIWKH'&GHYLFHOLEUDU\WKURXJKWKHFRPPDQG &?*$/,/(2! KDOOH\GIROORZHGE\ 7KHIROORZLQJILJXUHVKRZVWKHSURJUDPPDLQVFUHHQ 7KHSLFWXUHGLVSOD\HGRQWKHVFUHHQLVGLYLGHGLQWRWZRVHFWLRQV 7KHILUVWRQHDWWKHWRSZLOOLQFOXGHWKHGDWDRIWKHGHYLFH7KHVHFRQGRQHZLOOFRQWDLQWKHOLVWRI WKHDYDLODEOHGHYLFHVWKDWKDYHEHHQFDOLEUDWHGDOUHDG\ DWWKHILUVWLQVWDOODWLRQWKHOLVWLVHPSW\ DQG WKHOLVWRIWKHSURJUDPDFWLYHFRPPDQGV x SUHVVWKH,QVHUW!NH\WRFUHDWHDQHZGHYLFHWKHQLQVHUWWKHGDWDUHTXLUHG 7KH³'&,QVWUXPHQW´ILHOGLQGLFDWHVWKHQDPHW\SHRIWKHGHYLFH HJ7KHUPRPHWHU 7KH³/DEHO´ILHOGLQGLFDWHVWKHODEHOWKDWZLOOEHGLVSOD\HGRQWKHVFUHHQLQFRUUHVSRQGHQFHRIWKH WUDFHFRUUHVSRQGLQJWRWKHTXDQWLW\PHDVXUHG HJ& 7KH³;Q´DQG³<Q´ILHOGVUHSUHVHQWWKHFDOLEUDWLRQYDOXHVWREHVHWIRUWKHGHYLFHLQ'&DQGIRUWKH +$//(<UHVSHFWLYHO\ ,QSDUWLFXODU³;´DQG³;´UHSUHVHQWWKHWZRFDOLEUDWLRQYDOXHVH[SUHVVHGLQWKHPHDVXUHPHQWXQLW VHW7KH³<´DQG³<´ILHOGVUHSUHVHQWWKHYDOXHVPHDVXUHGE\WKH+$//(<FRUUHVSRQGLQJWRWKH WZRVDPSOHFDOLEUDWLRQYDOXHVRIWKHGHYLFH x 7XUQRQWKHGHYLFH HJ7KHUPRPHWHU DQGSRZHUWKH+$//(<7KHFRUUHFWPHVVDJHGLVSOD\HG ZLOOEH³+$//(<5($'<´ x &RQQHFWWKHGHYLFHDQDORJLFRXWSXWWRWKHILUVW'&FKDQQHORIWKH+$//(< LQSXWVDQGRI WKHLQSXWLQSXWER[ 7KHFDOLEUDWLRQPHDVXUHVPXVWDOZD\VEHSHUIRUPHGRQWKLVFKDQQHO , '&FKDQQHO x $FWLYDWHWKHFDOLEUDWLRQIXQFWLRQE\FRQWHPSRUDQHRXVO\SUHVVLQJERWKIXQFWLRQNH\VRIWKH +$//(< DQG DQGKROGLQJIRUDWOHDVWWKUHHVHFRQGV 7KHPHVVDJHGLVSOD\HGZLOOEH'&&$/,%7KH³<´W\SHPHDVXUHPHQWLVSHUIRUPHGHDFKWLPH\RX SUHVVWKH NH\ ([DPSOH x ,QWURGXFHWKHWKHUPRFRXSOHLQWRDVROXWLRQDW& LQGLFDWHGE\WKH³;´YDOXH x 3HUIRUPWKHPHDVXUHPHQWE\SUHVVLQJWKH NH\ 7KH/&'ZLOOGLVSOD\WKH³<´YDOXHHJ x ,QWURGXFHWKHWKHUPRFRXSOHLQWRDVROXWLRQDW& LQGLFDWHGE\WKH³;´YDOXH SUHVVWKH NH\WRSHUIRUPWKHPHDVXUHPHQWWKH/&'ZLOOGLVSOD\WKH³<´YDOXHHJ x :ULWHWKHYDOXHVUHDGRQWKHFDOLEUDWLRQFKDUDFWHULVWLFRIWKHWUDQVGXFHU x 3UHVVLQJWKHNH\H[LWVWKHFDOLEUDWLRQIXQFWLRQ x <RXFDQUHDFWLYDWHWKLVIXQFWLRQDV\RXZLVKMXVWSUHVVLQJDJDLQERWKWKH DQGWKHNH\VDWWKH VDPHWLPH ,I\RXFRQQHFWDVHULDORUSDUDOOHOFDEOHRU\RXLQVHUWWKHGLVN\RXFDQQRWUHDFWLYDWHWKHIXQFWLRQ DQ\PRUH 83*5$',1*7+(5(6,'(1762)7:$5($1'&+226,1*7+( /&'86(5,17(5)$&(/$1*8$*( 7KHVRIWZDUHUHVLGHQWRQWKH+$//(<LVSODFHGLQD)ODVKPHPRU\DQGFDQEHXSJUDGHGWKURXJK VHULDOFRQQHFWLRQZLWKD3& 0DWHULDOQHHGHG x 3&RUKLJKHUSURYLGHGZLWK 8$57RUKLJKHUZLWK'%RXWSXWFRQQHFWRU 0E)ORSS\GLVNGULYH x 6HULDOFRQQHFWLRQFDEOHIRUWKH+$//(< x )ORSS\GLVNFRQWDLQLQJLQIRUPDWLRQDERXWWKHVSHFLILFPDQDJHPHQWVRIWZDUHRIWKH+$//(< &2'( 3URFHGXUH x 3RZHUWKH3& x *RWRWKH'26SURPSW x 3RZHUWKH+$//(< x 3HUIRUPWKHVHULDOFRQQHFWLRQ x ,QVHUWWKHXSJUDGHGLVNLQWRWKH3&IORSS\GULYHDQGVHWWKHFXUUHQW3&GLUHFWRU\RQLWVURRW GLUHFWRU\HJ$?! x 5XQWKHEDWFK+83DQGSUHVV 7KHSURJUDPZULWWHQLQ(QJOLVKJLYHVDOOWKHQHFHVVDU\LQVWUXFWLRQVVWHSE\VWHSKRZHYHU x SURPSWVWRVSHFLI\WKHVHULDOSRUWXVHG ³(QWHUDYDLODEOH56SRUW>@´SHUFRP>@FRP>@ x VKRZVWKHUHOHDVHFRGHRIWKHVRIWZDUHFXUUHQWO\UHVLGHQWRQWKHXQLW &XUUHQW+$//(<VRIWZDUHUHOHDVH>90P@ x VKRZVWKHUHOHDVHFRGHRIWKHVRIWZDUHWKDWLVJRLQJWREHLQVWDOOHG ,WZLOOEHXSGDWHGWRUHOHDVH>90P@ x SURPSWVWRFRQILUPLQVWDOODWLRQ ³3UHVV<WRXSGDWH´ x LI\RXGRQ¶WZDQWWRSURFHHGXSGDWLQJSUHVVDQ\RWKHUNH\ZKLFKZLOOH[LWRWKHUZLVHWKH SURJUDPSURPSWV\RXWRVSHFLI\WKHODQJXDJHRIWKH/&'XVHULQWHUIDFH ³/&'XVHULQWHUIDFHODQJXDJHVHOHFWLRQ´ ³3UHVV´ ³(IRU(QJOLVK´ ³,IRU,WDOLDQ´ x WUDQVIHUVGDWDVKRZLQJWKHXSGDWHVWDWXV x %HIRUHH[LWLQJWKHSURJUDPUHPLQGV\RXWRSRZHUGRZQWKHXQLW ³3RZHUGRZQXQLWEHIRUHRSHUDWLQJDJDLQ³ ZKLFKPXVWDOZD\VEHGRQHWRUHWXUQWKHXQLWWRWKHRSHUDWLQJPRGH &+$37(5 $66(0%/,1*7+(+$//(< 7KLVFKDSWHUGHVFULEHVWKHSURFHGXUHVWRGLVDVVHPEOHDQGDVVHPEOHWKH+$//(<UHFRPPHQGHGLQ FDVHRIUHSODFHPHQWRIWKHLQWHUQDOERDUGV $66(0%/,1*7+($1$/2*,&%2$5' $VVHPEOHWKHDQDORJLFERDUGLQWRWKHLQIHULRUVKHOOIROORZLQJWKHLQGLFDWHGSURFHGXUH x 7DNHWKHLQIHULRUVKHOO% UHI x ,QWURGXFHWKHDQDORJLFERDUG% UHI VRDVWRPDNHWKHSDWLHQWFRQQHFWRU SHQHWUDWHWKHFHQWHURIWKHZLQGRZVSHFLDOO\SUHSDUHGIRULW x %ORFNWKHERDUGXVLQJVHOIWDSSLQJVFUHZV UHI %HIRUHGHILQLWHO\VFUHZLQJLQVHUWWKHSDWLHQW FDEOHWRYHULI\WKDWWKHERDUGLVFHQWHUHGFRUUHFWO\ x 9HULI\WKDWWKHFRYHURIWKHEDWWHU\UHFHSWDFOHPD\EHRSHQHGHDVLO\LIVWLIIUHPRYHLWDQGUXELWV HGJHVZLWKHPHU\SDSHUVRDVWRPDNHLWHDV\WREHRSHQHG x $VVHPEOHWKHFRQWDFWPROH[IORDWLQJFRQQHFWRU UHI DVVKRZQLQWKHILJXUH C QVHOIWDSSLQJ VFUHZV % &HQWUH % %DWWHU\ UHFHSWDFOH $9* UHGZLUH PP $9* EODFNZLUH PP $66(0%/,1*7+(/&'',63/$< $VVHPEOHWKHGLVSOD\RQWKHIURQWODEHOIROORZLQJWKHLQGLFDWHGSURFHGXUH x &DUHIXOO\VWLFNWKHDGKHVLYHIURQWODEHO UHI RQWKHIURQWSDQHO% UHI x )L[SODWHV UHI RQWKHIURQWSDQHO UHI XVLQJVFUHZVDQGZDVKHUV x )L[WKHSUHFDEOHG/&' UHI RQWKHIURQWODEHO UHI XVLQJWKHWZRXSSHUVFUHZVZLWK FRUUHVSRQGLQJZDVKHUV /&' 3ODWHV )URQW 3DQHO )URQWODEHO $66(0%/,1*7+(',*,7$/%2$5' $VVHPEOHWKHGLJLWDOERDUGLQWRWKHXSSHUVKHOOIROORZLQJWKHLQGLFDWHGSURFHGXUH x 7DNHWKHXSSHUVKHOO% x ,QWURGXFHWKHGLJLWDOERDUG%VRDVWRPDNHWKH3&0&,$FRQQHFWRUSHQHWUDWHWKH FHQWHURIWKHZLQGRZVSHFLDOO\SUHSDUHGIRULW x %ORFNWKHERDUGXVLQJVHOIWDSSLQJVFUHZVEHIRUHVFUHZLQJFRPSOHWHO\YHULI\WKDWWKHERDUGLV FRUUHFWO\FHQWHUHG x &RQQHFWWKHDX[LOLDU\SRZHUVXSSO\FRQQHFWRUPDOHHQG SRVLWLYHSROHUHG DQGPLQLIDVWRQHQG HDUWKEODFN x ,QVHUWWKHDOUHDG\DVVHPEOHGGLVSOD\LQWRLWVFDVH x 3XWWKHVRSUHSDUHGDVVHPEO\LQWRWKHXSSHUVKHOOVRWKDWLWOD\VVXSSRUWHGE\WKH3&0&,$ FRQQHFWRUDQGWKHFRQQHFWRURIWKHVHULDO x 6RIWVROGHUWKHVFUHHQZLWKWKHVHULDOFRQQHFWRU x &RQQHFWWKHDQDORJLFZLWKWKHGLJLWDOERDUGWKURXJKWKHIODWFDEOH x /LQNWKHEDWWHU\YROWDJHFDEOHWR3 x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x &RGHQXPEHU x 'HVFULSWLRQRIWKHFRPSRQHQWV x 4XDQWLW\XVHG &RGH % % % % % % 'HVFULSWLRQ 'LJLWDO%RDUG 0DVWHU$QDORJLF%RDUG 6ODYH$QDORJLF%RDUG 8SSHUVKHOO /RZHUVKHOO /&''LVSOD\ 4W\ &+$37(5 (/(&75,&$1'$66(0%/<',$*5$06 ,QWKLVFKDSWHUDUHHQFORVHGWKHHOHFWULFDQGDVVHPEO\GLDJUDPVRIWKHIROORZLQJERDUG &RGH 'HVFULSWLRQ % +DOOH\'LJLWDO%RDUG % % +DOOH\$QDORJ%RDUG +DOOH\6ODYH$QDORJ%RDUG